Standard Chartered to pay $300M in penalties

Standard Chartered will pay $300 million in fines related to alleged money laundering. This comes two years after the U.K.-based bank paid $340 million in other penalties.

The $300 million is part of a settlement with the New York bank regulator, the Department of Financial Services. In addition, the bank will suspend dollar clearing involving some higher-risk retail clients in Hong Kong and it will also give up some clients in the United Arab Emirates.

The $340 million penalty was ordered in 2012 after allegations were made about money laundering involving Iran. Also, a monitor will watch over transactions for two years.

"If a bank fails to live up to its commitments, there should be consequences," New York banking regulator Benjamin Lawsky said in a statement. "That is particularly true in an area as serious as anti-money-laundering compliance, which is vital to helping prevent terrorism and vile human rights abuses."

The compliance remediation failures were found by the department’s monitor. “The Bank failed to detect a large number of potentially high-risk transactions for further review,” the department explained in a statement. “A significant amount of the potentially high-risk transactions the system has failed to detect originated from its Hong Kong subsidiary ("SCB Hong Kong") and SCB's branches in the United Arab Emirates ("SCB UAE"), among others.”

The monitor also found out that a SCB Rulebook had “numerous errors and other problems, resulting in SCB's failure to identify high-risk transactions for further review. SCB failed to detect these problems because of a lack of adequate testing both before and after implementation of the transaction monitoring system, and failed to adequately audit the transaction monitoring system,” the statement from the department added.

Because of money-laundering concerns, the bank was also required to pay $327 million to the federal government in 2012, according to news reports.

In another incident related to money laundering, Lawsky's office fined PricewaterhouseCoopers $25 million. The firm will also be prevented from doing certain consulting work for two years. And it will change its procedures to avoid conflict of interest. The incident involves a report at Bank of Tokyo-Mitsubishi. The report related to wire transfers involving Iran and other nations that were under U.S. economic sanctions, according to a report from The Wall Street Journal.The bank paid $250 million in 2013 as part of a settlement.

Contributing Author

Ed Silverstein

Ed Silverstein is a veteran writer and editor for magazines, websites and newspapers. A graduate of Harvard's Kennedy School of Government, he has won several...